For centuries, sugar was like gold for the European colonial empires. Battles were fought for it, stately homes were built on profits from it, and millions of slaves suffered and died for it in the cane-fields of the Caribbean. But yesterday’s white gold is today’s white elephant, with current world sugar prices too low to cover the costs of production in the many developing countries still dependent on the crop.
According to a new World Development Movement publication "Sugar Crisis in the Third World", the slump in prices is also European in origin.
Panicked by record world sugar prices in 1974, the EEC brought in subsidies to persuade its own farmers to plant more sugar-beet. Today, the EEC pays nearly three times the going world price to its beet-farmers and, not surprisingly, the production of sugar from European soil has jumped 40% in five years.
To dissolve the inevitable sugar ‘lump’ that has accumulated inside Europe, the EEC is now dumping on the world market - so depressing the prices, and the farmers, of the Third World’s cane-crop. From being a major importer, Europe is now second only to Cuba as an exporter of sugar.
There is also a cost to the European taxpayer. In 1978 the cost of subsidising sugar-beet in the EEC was over $900 million - about the same as the total UK overseas aid programme for the same year.
New Internationalist North American editor Wayne Ellwood adds: New legislation proposed in the U.S. may leave Third World sugar producers completely shut out of one of their greatest potential markets. Legislation now before Congress will fix the domestic price of refined sugar some 60 per cent above the world price. It will also stiffen current regulations which protect U.S. sugar growers against foreign competition.
If passed, the new legislation will virtually phase poor nations out of the U.S. sugar market by building insurmountable tariff walls. The major beneficiaries will be the giant corporations who control most sugar processing in the U.S. - Gulf and Western, Amstar and the U.S. Sugar Corporation. An American consumer group, Citizens Against Sugar Hikes, estimates that sugar producers already reap $160 million a year in government subsidies.